TABLE OF CONTENTS 1 Introduction... 10 1.1 Purpose & Scope of the Manual... 10 1.2 Responsibility for the Manual... 11 2 Regulatory Framework... 12 2.1 Introduction to the FCA... 12 2.2 Financial Services Regulatory Framework... 12 2.2.1 FCA's Objectives... 13 2.2.2 FCA Handbook Overview... 13 3 Compliance Program... 15 3.1 Introduction... 15 3.2 Scope of Your Business... 15 3.3 Regulatory Business Plan... 16 3.3.1 INSERT: Organisational Chart... 18 3.4 Status Disclosure Statement... 18 3.5 Compliance Statement... 19 3.5.1 Compliance Monitoring Document... 19 3.6 Compliance Officer... 19 3.7 Compliance Policy... 20 4 Principles for Business (PRIN)... 24 4.1 Introduction... 24 4.2 The Principles... 24 4.2.1 Our Approach to PRIN... 25 5 Conduct of Business (COBS)... 26 5.1 Introduction... 26 5.2 Conduct of Business Obligations (COBS 2)... 26 5.2.1 Conduct of Business Policy... 26 5.3 Client Agreements (COBS 8)... 34 5.3.1 Record Keeping for Client Agreements... 35 5.4 Providing Product Information to Clients (COBS 14)... 35 6 Senior Management Arrangements, Systems & Controls (SYSC)... 38 6.1 Introduction... 38 6.2 General Organisational Requirements... 38 6.2.1 INSERT: Business Continuity... 39 6.3 Compliance... 40 6.3.1 Compliance with the Rules... 40 6.4 Compliance Breach Policy... 41 6.5 Compliance Breach Procedures... 43 6.5.1 Breach Incident Form... 47 2
6.6 Internal Audits... 49 6.7 Audit & Monitoring Policy & Procedures... 49 6.7.1 Compliance Monitoring Assessment Form... 58 6.8 Quality Assurance & Performance Policy & Procedures... 59 6.8.1 Appendix A - Staff Monitoring Form... 64 6.9 Risk Management... 66 6.9.1 Risk Management Policy & Procedures... 66 6.10 Risk Matrix... 78 6.11 Risk Register... 81 6.12 Risk Mitigating Action Plan... 82 6.13 Outsourcing... 83 6.13.1 General Requirements... 83 6.13.2 Introducer/Lead Generator Agreement... 84 6.14 Outsourcing & Supplier Policy & Procedures... 88 6.15 Record Keeping... 97 6.15.1 Guidance on Record Keeping... 97 6.15.2 Meeting Minutes Template... 98 6.16 Records Management Policy... 98 6.16.1 Records Retention Policy... 100 6.17 Records Retention Periods Register... 102 6.18 Change Management Policy... 103 6.18.1 Request for Change Form... 111 6.19 Conflicts of Interest... 112 6.19.1 Chinese Walls... 113 6.20 Conflicts of Interest Policy... 113 6.20.1 Conflict of Interest Register... 117 6.20.2 INSERT: Conflicts of Interest Procedures... 117 6.21 Whistleblowing... 117 6.21.1 Public Interest Disclosure Act... 118 6.22 Whistleblowing Policy & Procedures... 118 6.22.1 Whistleblowing Complaint Form (Template)... 124 6.23 Remuneration... 126 6.23.1 FCA Remuneration Code Principles... 126 6.24 Remuneration Policy... 127 6.24.1 INSERT: Remuneration Procedures... 129 7 Data Protection & Security... 130 7.1 Data Protection... 130 7.1.1 Commitment to Comply with Data Protection Act... 131 7.1.2 Data Protection Principles... 132 7.2 Data Protection Officer... 132 3
7.2.1 Duties of the Data Protection Officer... 133 7.2.2 Designated Data Protection Officer... 133 7.2.3 Deputy Data Protection Officer... 134 7.3 Data Protection Policy & Procedures... 134 7.4 Data Protection Audit... 142 7.4.1 Privacy & Electronic Communications Regulations... 142 7.5 Employee Confidentiality Agreement... 143 7.5.1 Non-Disclosure Agreement (NDA) Template... 144 7.6 General Data Protection Regulation (GDPR)... 147 7.6.1 GDPR Policy & Procedure... 147 7.6.2 GDPR Data Retention Policy... 186 7.6.3 GDPR Data Breach Policy... 195 7.6.4 GDPR Audit Checklist (External)... 202 7.6.5 GDPR Employee Assessment (External)... 202 7.6.6 Data Protection Impact Assessment (DPIA) (External)... 202 7.7 Information Security... 203 7.7.1 Information Security Policy... 204 7.7.2 Access Control & Password Policy... 214 7.7.3 BYOD & Remote Access Policy... 221 7.7.4 Asset Management Policy... 227 7.7.5 Information Asset Register (External)... 237 7.7.6 Secure Disposal Policy... 237 7.7.7 Clear Desk Policy... 240 7.8 Information Security Audit... 243 7.9 PCI Compliance... 244 7.9.1 PCI Compliance Policy... 244 8 Financial Crime & AML... 249 8.1 Introduction... 249 8.1.1 Proceeds of Crime Act... 250 8.2 Money Laundering Reporting Officer (MLRO)... 251 8.2.1 MLRO Annual Report... 251 8.2.2 National Crime Agency (NCA)... 252 8.2.3 The Financial Action Task Force (FATF)... 252 8.3 AML Measures & Controls... 252 8.3.1 Introduction... 252 8.3.2 Anti-Money Laundering Audit... 253 8.3.3 Anti-Money Laundering Policy & Procedures... 254 8.4 Suspicious Activity Reporting... 267 8.4.1 Suspicious Activity Report (SAR) Internal Template... 267 8.5 Bribery & Corruption... 268 4
8.5.1 Introduction... 268 8.5.2 Anti-Bribery Principles... 269 8.5.3 Anti-Corruption & Bribery Policy... 270 9 Know Your Customer & Due Diligence... 275 9.1 Introduction... 275 9.1.1 Know Your Customer Controls... 275 9.1.2 Enhanced Due Diligence... 276 9.1.3 Politically Exposed Persons (PEPs)... 277 9.1.4 Cross-Border Due Diligence... 277 9.1.5 Non-UK Country AML Requirements... 278 9.2 Due Diligence Policy... 278 9.3 Due Diligence Questionnaire... 282 9.4 Due Diligence Checklist... 287 10 Market Abuse... 291 10.1 Introduction... 291 10.2 Market Abuse Policy... 291 10.2.1 Suspicious Transaction or Order Report (STOR) Form... 308 10.2.2 Insider List Template (Excel)... 313 11 Threshold Conditions (COND)... 315 11.1 Introduction... 315 11.1.1 Location of Offices... 315 11.1.2 Effective Supervision... 315 11.1.3 Appropriate Resources... 316 11.1.4 Suitability... 316 11.1.5 Business Model... 316 11.2 Threshold Conditions Policy & Controls... 317 12 Approved Persons & Controlled Functions (APER & FIT)... 327 12.1 Introduction... 327 12.1.1 The Statements of Principle for Approved Persons... 328 12.1.2 The Code of Practice for Approved Persons... 328 12.2 Approved Person & Controlled Functions Policy... 329 12.3 Controlled Functions... 334 12.3.1 Controlled Functions & Approved Persons Register... 335 12.4 SMF Roles... 335 12.5 SMF Manager Handover Policy... 336 13 Recruitment & Induction... 343 13.1 Introduction... 343 13.1.1 Competence... 343 13.1.2 Assessing & Maintaining Competence... 344 13.2 Supervisors... 345 5
13.3 Employee Recruitment Policy & Procedure... 345 13.3.1 Sample Interview Questions & Scoring... 350 13.4 Employee Induction Policy... 353 13.4.1 Induction Checklist... 356 13.4.2 Job Description Example... 359 14 Employee Training & Assessment... 361 14.1 Training... 361 14.2 Training & Development Policy & Procedure... 362 14.2.1 Training Evaluation Form... 366 14.2.2 Training & Development Log... 369 14.2.3 Employee Training Record... 370 14.3 Employee Assessment Papers... 371 14.3.1 Assessment Structure... 371 14.3.2 Assessment Analysis... 371 14.3.3 Assessment Q&A Format... 372 14.4 Arrears & Default Assessment Q&A Papers (external)... 372 14.5 AML & Financial Crime Assessment Q&A Papers (external)... 372 14.6 DPA & Information Security Assessment Q&A Papers (external)... 372 14.7 FCA & Regulation Assessment Q&A Papers (external)... 372 14.8 TCF Assessment Q&A Papers (external)... 373 14.9 Vulnerable Customers Assessment Q&A Papers (external)... 373 14.10 Complaint Handling & Disputes Assessment Q&A Papers (external)... 373 14.10.1 Call Monitoring Checklist & Assessment... 374 15 Responsibilities to Customers... 380 15.1 Treating Customers Fairly (TCF)... 380 15.1.1 What is TCF?... 380 15.1.2 Expectations of Firms... 381 15.1.3 Six TCF Outcomes... 381 15.2 Treating Customers Fairly Policy... 382 15.3 Insert: Treating Customers Fairly Procedures... 387 15.3.1 TCF Procedure Guidance... 387 15.4 Treating Customers Fairly Audit... 390 15.5 Vulnerable Customers... 390 15.5.1 Approach to Vulnerable Customers... 391 15.5.2 Identifying Vulnerable Customers... 391 15.5.3 Debt & Mental Health MALG... 392 15.5.4 Debt & Mental Health Evidence Form (DMHEF)... 392 15.6 Vulnerable Customers Policy & Procedures... 392 15.7 Vulnerable Customer Audit... 402 16 General Provisions (GEN)... 403 6
16.1 Introduction... 403 16.2 Statutory Disclosure Status... 403 16.2.1 Additional Disclosure Requirements... 403 16.2.2 General Disclosure Notes... 404 16.2.3 Insurance against Penalties... 405 16.3 Consumer Call Charges Rules... 405 16.4 Appointed Representative (AR) Principal Requirements... 406 16.4.1 Due Diligence for Appointing AR... 408 16.5 Appointed Representatives (SUP 12)... 409 16.5.1 Appointed Representative Monitoring Procedures... 409 16.5.2 Insert: Appointed Representative Agreement... 412 16.5.3 Insert: Appointed Representative On-boarding Procedures... 412 17 Supervision (SUP)... 413 17.1 Introduction... 413 17.2 General Guidance... 414 17.3 Reports by Skilled Persons... 414 17.4 Notifications to the FCA... 414 17.5 Reporting Requirements... 415 17.5.1 Internal Reports... 415 17.6 Management Information Policy... 415 17.6.1 FCA Reports... 419 17.6.2 Compliance Reporting... 419 18 Decision Procedure and Penalties (DEPP)... 420 18.1 Introduction... 420 18.2 Penalties... 420 19 Dispute Resolution: Complaints (DISP)... 421 19.1 Introduction... 421 19.1.1 Financial Ombudsman Service (FoS)... 421 19.2 Complaint Handling... 422 19.2.1 Complaint Handling Policy & Procedure... 422 19.2.2 Complaint Handling Log (Excel)... 429 19.2.3 Complaint Handling Form... 429 19.3 Complaint Handling & Disputes Audit... 431 20 Consumer Credit Sourcebook (CONC)... 432 20.1 Introduction... 432 20.2 Guidance on Financial Difficulties... 432 20.2.1 Financial Difficulties Policy... 433 20.2.2 Affordability Assessment Calculator (Excel)... 439 20.3 General Principles for Credit-Regulated Activities... 439 20.3.1 Credit Broking... 439 7
20.3.2 Credit References... 440 20.3.3 Credit Broker Refunds... 441 20.3.4 Transparency of Status... 441 20.3.5 Disclosure of Commission and Fees... 441 20.3.6 INSERT: Services and Costs Disclosure Document... 441 20.4 Lenders... 442 20.4.1 General Conduct... 442 20.4.2 Provision of Credit Card Cheques... 442 20.4.3 Credit References... 442 20.5 Responsible Lending Policy... 442 20.6 Affordability & Creditworthiness Policy & Procedures... 447 20.6.1 Income & Expenditure Form... 453 20.7 Debt Counselling, Adjusting and Credit Information Services... 455 20.8 Distance Marketing... 456 20.8.1 Distance Marketing Policy... 458 20.8.2 Distance Marketing Checklist... 463 20.9 E-commerce... 464 20.9.1 E-Commerce Policy... 465 20.10 Financial Promotions & Customer Communication... 469 20.10.1 Communication & Financial Promotion Checklist... 469 20.10.2 Financial Promotions & Communication Policy... 473 20.11 Pre-Contractual Requirements... 484 20.11.1 Pre-Contract Disclosure Policy... 484 20.11.2 Key Features Disclosure Information Leaflet... 492 20.11.3 Pre-Contractual Checklist... 496 20.12 Commissions... 497 20.13 Continuous Payment Authorities... 498 20.13.1 CPA Policy & Procedures... 498 20.14 Post-Contractual Requirements... 502 20.14.1 Post-Contract Policy... 503 20.15 Cancellation & Refund Policy... 509 20.16 Arrears, Default & Recovery... 511 20.16.1 Introduction to Arrears... 512 20.16.2 Arrears & Default Policy & Procedures... 512 20.17 Arrears, Default & Financial Difficulty Audit... 519 20.18 Application of Interest & Charges... 519 20.19 Communication with Customers... 520 20.20 Data Accuracy... 521 20.21 Debt Recovery Policy & Procedures... 521 20.21.1 Debt Advice... 536 8
20.21.2 Credit Information Services... 537 20.22 Debt Management Plans... 538 20.22.1 Prudential Rules for Debt Management Firms... 538 20.22.2 Debt Advice Policy & Procedures... 539 20.23 Credit Reference Agencies... 545 20.23.1 Cost Cap for High-Cost Short-Term Credit... 547 21 Business Operational Procedures... 549 21.1 INSERT: Add Own Procedures Here... 549 21.2 INSERT: Add Own Procedures Here... 549 22 Employee Declaration... 550 22.1 Compliance Declaration Form... 550 23 Compliance Audit Checklists......(External Pages) 550-722 24 Employee Assessment Q&A Papers.....(External Pages) 722-843 25 CASS Manual & Resolution Packs......(External Pages) 844-942 9